NOTE - This article is just to draw attention to what I consider a key issue affecting the working class heros of the United States. I am not an investigative reporter - that work was already done. I'm just giving you a place to start looking
On a camping trip at the Oregon Coast I was listening to a Public Radio show called "Talk of the Nation" I heard something that I found almost impossible to believe. James D. Sinegal was critized for the excellent pay and benefits the Costco Employees receive. Now I've shopped at Costco and Sam's Clubs/Walmart and I can tell you there is a real difference. Investors are discouraged from buying stock in Costco and I know the signal being sent is a wrong one for the U.S.A. If you wondered why Enron, World Com, and others had continued to gouge customers and employees and other companies still do look at what Bill Dreher, a retailing analyst with Deutsche Bank Securities Inc. told The Wall Street Journal. While he critized Sinegal and Costco for over generous employee treatment a female analyst on Talk of the Nation criticized Costco and Sinegal for treating customers too well and should raise prices as well.
The Saint Louis Post-Dispatch published this article
CLASS AND SOCIETY: Let the warehouse war begin
By Kevin Horrigan
"Costco does $795 in sales for every square foot of retail space in its warehouse stores, compared with $516 per square foot at Sam's Club stores. Costco makes $13,647 in profits for each of its 68,000 full-time employees. Sam's Club makes $2,600 less than that for each of its 102,000 employees.
So how did Wall Street react to last quarter's good news? By bidding Costco shares down by 4 percent. Reason: Wall Street figures Sinegal is too darned nice to his employees - paying them living wages, covering 92 percent of their health care costs, giving them generous vacation and leave benefits and, in general, treating them like human beings. If only Jim Sinegal would take a page from Sam Walton, Wall Street figures, his company would be doing even better.
"From the perspective of investors, Costco's benefits are overly generous," Bill Dreher, a retailing analyst with Deutsche Bank Securities Inc. told The Wall Street Journal. "Public companies need to care for shareholders first. Costco runs its business like it was a private company."
Another article at a web site nicely called "the Church of the customer shows a graphic that shows the difference between Walmart and Costco on the employee benefits given
For anyone who wants a real eye opener read this excerpt from
The New York Times
April 4, 2004
Two Pay Packages, Two Different Galaxies By GRETCHEN MORGENSON
"A 2000 survey by Towers Perrin, the consulting firm, found that the pay of chief executives, on average, was 531 times that of their lowest-paid rank-and-file workers. But Mr. Sinegal's salary is less than 10 times that earned by his company's top hourly employees and roughly double the salary of a Costco warehouse manager, he said. "But bear in mind I have been rewarded by the stock," he said. "I rejected my bonus because we had a couple of years where we hadn't performed up to our standards. We were more profitable than the year before, but we didn't hit the standards we had set for ourselves, so we didn't think we were entitled."
Bravo Mr. Sinegal